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Thanks to the government shutdown, Dry Land Distillers is unable to release its newest product, a gin infused with Colorado-grown botanicals. (Photo courtesy of Dry Land Distillers)

Government Shutdown Strangles Colorado Brewers and Distillers

Without approval from the federal government, local companies can’t release new products or even open their doors.

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Nels Wroe, co-founder of Dry Land Distillers in Longmont, spent last autumn legally foraging for Colorado-grown botanicals that would flavor a new gin he was developing. After spending months finalizing his recipe, Wroe anticipated a big release party for the spirit in February.

But the gin sits in a tank. And instead of calling it Colorado Winter Gin, he may as well name it something like Stalled Sauce, since he can’t serve it.

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The barrier? Our federal government—or lack thereof. Wroe can’t sell bottles of his new gin because the bottles require federally approved labels. And for now, at least, none of the label-reviewers at the Alcohol and Tobacco Tax and Trade Bureau (TTB) in Washington, D.C. are working due to the nearly month-long government shutdown.

“It will be silly to release a seasonal winter gin in April or May, which may be when we finally get our label approved,” Wroe says. “We will probably have to submit another label. We won’t have the bump of revenue in February, which makes a big difference for a small business. So there are costs and frustrations. And some very disappointed customers. Maybe the shutdown will be solved because people can’t get their craft spirits or beer.”

Of course the shutdown hits federal workers hardest, but its effects ripple far beyond employee paychecks. For the heavily regulated alcohol industry, the shutdown prevents companies from releasing new products—either they can’t get labels for their new IPAs and whiskeys, or they are stuck at an earlier stage in the process, seeking federal approval for their formulas.

People seeking to open new breweries and distilleries are also on hold during the shutdown. “We are waiting for our brewer’s notice. We can’t open up for business, or even start brewing, until we get that. Really, we can’t do anything,” says Over Yonder Brewing co-founder Jason Bilodeaux. A Colorado native who has sunk “hundreds of thousands of dollars” into his Golden brewery (which he owns with his wife and his sister), Bilodeaux has devoted two years to turning his long-held dream into something involving bricks, mortar, and suds. When it opens, Over Yonder will be the closest brewpub to Red Rocks Amphitheater. Open or not, he will start paying rent on the space soon.

“It’s not one of those things that you expect,” he says. “But now we’ve got to roll with it.”

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The team at Spirit Hound Distillers in Lyons also awaits federal approval for a new gin, but their complications extend beyond selling hooch to people on their way to Estes Park. Six-year-old Spirit Hound is poised to expand and is in the midst of buying the property next door. The purchase still might go through, but turning a piece of real estate into a commercial alcohol establishment, even if just for additional storage, requires significant paperwork back-and-forth between Spirit Hound and the TTB.

“The funny thing is, we can still pay our excise taxes,” says co-founder Craig Engelhorn.

One worry for nearly everybody in the booze business: the inevitable backlog once the doors at the TTB reopen. The longer the wait, the deeper the stack of applications facing federal employees upon their return. What normally might take a few weeks, could take months. Estimates from the TTB were unavailable, as those employees are not available to answer questions.

“We are OK for now. We plan for things like this. Even though they say label turn-around is normally under 30 days, we plan for six months,” says Leopold Bros. distillery co-founder Todd Leopold. “But there is a cascading effect. Everything depends upon when the federal government reopens for business.”

New Belgium Brewing has four beers waiting for federal approval, including a pair of IPAs and two small-batch, limited releases. None of them need to go out the door immediately; like Leopold Bros., New Belgium builds in buffers for approvals. But if the shutdown continues to drag on—and just yesterday, President Trump said he would “never, ever back down” on his demand for a wall along the border with the United States and Mexico—things could grow complicated.

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“If it goes on much longer, issues surrounding the timing of releases will amass,” says New Belgium spokesman Bryan Simpson. “We would really have to start shifting scheduling around. This is hard on all brewers.”

Steve Kurowski, operations director for the Colorado Brewers Guild, says the shutdown is especially tough on small breweries. “You may have spent several hundreds of thousands of dollars on equipment, and you are paying rent, and you cannot get approval from the federal government,” he says. “Your license is sitting on a desk in Washington. You are just hemorrhaging. The first thing you need to do is start making beer to pay off those loans.”

Winter in Colorado

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